The deal will bring the Scripps station portfolio to 51 stations in 36 markets with a reach of nearly 21% of U.S. TV households and includes three duopolies — in Helena and Great Falls, Montana, and Corpus Christi, Texas. Cordillera is selling its remaining station, NBC affiliate KVOA Tucson, Ariz., to Quincy Media.

October 29, 2018 7:50 EDT by Mark K. Miller
The E.W. Scripps Co. is acquiring 15 television stations in 10 markets from Cordillera Communications, furthering what Scripps calls its “strategies to increase the durability and improve the operating performance” of its broadcast portfolio. The purchase price is $521 million.

The acquisition grows the Scripps local television station footprint to 51 stations in 36 markets with a reach of nearly 21% of U.S. TV households.

In addition to the increased reach, Scripps said the purchase adds to its market leadership, with all but one of the acquired stations ranking as No.1 in their markets. It also adds depth to its local media footprint through the addition of three duopolies — in Helena and Great Falls, Montana, and Corpus Christi, Texas.

WLEX, the NBC affiliate in Lexington, Ky.
KOAA, the NBC affiliate in Colorado Springs, Colo.
KATC, the ABC affiliate in Lafayette, La.
KSBY, the NBC affiliate in Santa Barbara-San Luis Obispo, Calif.
KRIS, the NBC affiliate, and KAJA, a Telemundo affiliate, in Corpus Christi, Tex.
KPAX and KAJJ, a CBS affiliate in Missoula, Mont.
KTVQ, a CBS affiliate in Billings, Mont.
KXLF-KBZK, the CBS affiliate in Butte-Bozeman, Mont.
KRTV, the CBS affiliate, and KTGF, the NBC affiliate, in Great Falls, Mont.
KTVH, the NBC affiliate, and KXLH, the CBS affiliate, in Helena, Mont.
Scripps said financial highlights of the deal include:

The portfolio is immediately accretive to margins for the Local Media segment and the company.
Based on Cordillera’s blended 2017 actual and 2018 estimated revenues of $158 million and EBITDA of $63 million, adjusted for synergies, the purchase price multiple is 7.2x net of tax benefits.
The Cordillera stations have strong local brands and are well run and nicely positioned in their markets, said Brian Lawlor, president of Local Media. “Through this transaction, Scripps will operate the No. 1-rated TV stations in a third of its markets, enhancing the durability of our portfolio,” he added. “The acquisition also allows us to go deeper in new markets with the addition of three new duopolies, including two with Big Four combinations.”

Scripps emphasized what it called the resulting “stronger Scripps portfolio”:

Scripps will have the No. 1 Nielsen-rated TV stations in 11 of its 36 markets.
The Cordillera stations will significantly diversify the Scripps portfolio, growing it to 51 stations, including 18 ABC stations, 11 NBC stations, seven CBS stations and two Fox stations.
Scripps will operate seven duopolies, efficiently enhancing the depth and durability of the portfolio.
“In addition to the immediate benefits to our portfolio’s operating performance, this deal leaves Scripps with the capability to continue to pursue incremental and transformative deals for television stations,” said Adam Symson, Scripps president and CEO. “We will continue to pursue all appropriate avenues to enhance the scale and operating performance of our local media portfolio.”

The 10 Cordillera markets have about 700 employees.

Cordillera Communications is owned by Evening Post Industries. Scripps is not buying Cordillera’s remaining station in Tucson, Ariz., because Scripps already operates a duopoly in that market. There are no other overlapping markets.

Separately, Cordillera announced that its one other station, NBC affiliate KVOA Tucson, Ariz., is being sold to Quincy Media. “Our stations are as strong as they’ve been across any point in our 32-year history,” said Terry Hurley, president of Cordillera. “We’ve had a good run, and we’re proud of how our stations have excelled over the years. We’re also heartened to know they’ll continue to be in exceptional hands.”

The Scripps transaction will be financed through an incremental term loan underwritten by Wells Fargo. Scripps’ existing Term Loan B and senior unsecured notes will remain in place. The company anticipates its total leverage ratio, net of cash, would be approximately 4.8x at closing, including estimated synergies.